International Prices Research Articles

Connection between climatic change and international food prices: evidence from robust long-range cross-correlation and variable-lag transfer entropy with sliding windows approach

As nations progress, the impact of climate change on food prices becomes increasingly substantial. While the influence of climate change on the yields of major agricultural products is widely recognized, its specific effect on food prices remains uncertain. This study delves into the impact of the North Atlantic Oscillation (NAO) index, a well-established climate indicator, on global food prices. To accomplish this, a robust bivariate Hurst exponent (robust bHe) is applied. The study employs a sliding windows approach across various time scales to produce a color map of this coefficient, presenting a time-varying version. Furthermore, variable-lag transfer entropy with a sliding windows approach is utilized to discern causal relationships between the NAO index and international food prices. The findings reveal that significant increases in the NAO index are correlated with noteworthy upswings in various international food prices over both short and long-term periods. Additionally, variable-lag transfer entropy confirms the causal role of the NAO index in influencing international food prices.

Assessing the implications of imported electricity equipment in Indonesia: A comprehensive ECM approach for short-term and long-term analysis

This study aims to explore the implications of imported electrical equipment in Indonesia, analysing both short-term and long-term impacts using a quantitative approach. The research focuses on understanding how various economic factors, such as domestic production, international pricing, national income, and exchange rates, influence the country’s import dynamics in the electrical equipment sector. Employing an Error Correction Model (ECM) for regression analysis, the study utilises time-series data from 2007 to 2021 to delve into the complex interplay of these variables. The methodology involves a comprehensive analysis using the Augmented Dickey-Fuller and Phillips-Perron tests to assess the stationarity of the data. This approach ensures the robustness of the ECM, which is employed to analyse the short-term and long-term effects of the identified variables on electrical equipment imports in Indonesia. The results reveal significant relationships between these economic factors and import levels. In the short term, imports are shown to be sensitive to changes in domestic economic conditions and international market prices, while in the long term, the country’s economic growth, reflected through GDP, emerges as a significant determinant. The findings suggest that Indonesia’s electrical equipment import policies must adapt highly to domestic and international economic changes. In the short term, a responsive approach is required to manage the immediate impacts of market fluctuations. The study highlights the importance of aligning import strategies with broader economic growth and environmental sustainability goals for long-term sustainability. Policymakers are advised to focus on enhancing domestic production capabilities, reducing import dependency, and ensuring that environmental considerations are integral to import policies. This study contributes to understanding import dynamics in a developing country context, offering valuable insights for policymakers and industry stakeholders in shaping strategies for economic growth and sustainability in the electrical equipment sector. The findings underscore the need for a balanced, data-driven approach to managing imports, aligning short-term responses with long-term strategic objectives for Indonesia’s ongoing development and industrial advancement.

Fluctuations oil prices in the world and their impact on Indonesian macroeconomics

Abstract Changes in international crude oil prices can significantly impact economic outcomes. This study tested the impact of oil price fluctuations on macroeconomic variables in Indonesia. The data used is annual data from 1990 to 2021 with the specific purpose of solving the current research deficiency about swings in oil prices. study adds five macroeconomic variables as explanatory factors to accomplish this purpose. We use five macroeconomic variables: economic growth, inflation, interest rates, industrial production, and exchange rates. The impact of oil price fluctuations on GDP, inflation, exchange rates, interest rates, and industrial production indices in Indonesia is examined within a structural vector autoregressive (SVAR) framework. Research shows that oil price shocks significantly impact GDP, inflation, and exchange rate. The results also show that oil price shocks hurt two other variables: the interest rate variable and the industrial production index. The findings derived from the analysis of the impulse response function indicate a detrimental effect on the growth of production, while exerting a favourable influence on inflation. However, the impact on industrial production, interest rates, and exchange rates is very modest and characterised by a degree of uncertainty.

Leadership shift in the global soybean market: Dynamic connectedness approach (TVP-VAR)

The price transmission in international soybean market has been extensively examined. However, recent econometric advancements have enabled the application of dynamic connectedness methodology as outlined by Antonakakis and Gabauer (2017) [1], which is based on a Time-varying Parameter Vector Autoregressive (TVP-VAR) model. This approach captures the time-varying connectedness of time series, considering potential risk shock emitters and receivers. The connectedness index (Diebold and Yilmaz, Jan. 2012) [2] was developed using Generalized Forecast Error Variance Decomposition (GFEVD) and the Generalized Impulse Response Function (GIRF) (Koop et al., Sep. 1996; Pesaran and Shin, Jan. 1998) [3,4]. This study aims to understand the dynamic connectedness and price leadership. The research examined markets including the US Soybean futures market (Chicago Board of Trade), Rotterdam Port spot market representing the European soybean market, Paranaguá port representing Brazil, Argentina represented by Rosario Futures and Spot, and the Chinese domestic spot market and the Dalian futures on behalf of China. The research spanned approximately ten years, from September 2009 to May 2019. The findings suggest that the soybean market has reached a high level of maturity, able to withstand exogenous shocks for at least the past seven years. The net pairwise directional connectedness revealed dynamic and bidirectional causality. The dynamic connectedness index showed a highly connected and developed market in the West (Chicago Futures, Rotterdam, Paranaguá, and Rosario Futures and Spot). However, the connectedness between Western and Eastern markets was relatively low, indicating some level of market isolation. Furthermore, the pairwise connectedness index between Eastern market (China spot and Dalian Futures) was also considerable low. Lastly, Paranaguá and Rosario overtook Rotterdam as price-leading markets and were identified as the primary net transmitters of shocks, indirectly implying causality. Chicago, Rosario, and Paranaguá formed a triumvirate leading international prices, while Rotterdam adopted a secondary leading position, deviating from its historical role as the price leader.

The ripple effects of international energy prices on domestic products in China under external shocks

The ripple effects of international energy prices on domestic products in China under external shocks

A Financial Analysis and Valuation of Chevron Corporation

With the continuous development of the global economy, the demand for energy continues to grow, and the market size of oil and gas as an important source of energy continues to expand, and the growth potential of the oil and gas market in the future is still huge. As an internationally renowned energy company, Chevron occupies an important position in the global oil and gas market. Firstly, the financial indicator analysis method is used to compare the financial data in 2023 with the other three energy companies to obtain its financial strength with strong asset liquidity, high solvency and strong profitability. Secondly, from the aspects of profitability, development ability and valuation, it is concluded that Chevron has strong market competitiveness, large room for stock price growth, and greater investment opportunities. Finally, it is concluded that Chevron has a high investment value, but it still faces certain risks and challenges, and it is necessary to pay attention to the impact of international oil price fluctuations on the company's performance and should pay close attention to its risk factors and take corresponding measures to face it positively.

Did the entry of the corn ethanol industry in Brazil affect the relationship between domestic and international corn prices?

AbstractThis study investigates the relationship between corn prices in Brazil and the international market, considering a rise in corn ethanol production in Brazil's Midwest region since 2017. Did the entry of the corn ethanol industry in Brazil affect the relationship between domestic and international corn prices? A cointegration analysis was made with a monthly time series from May 2005 to August 2023 controlling for different exogenous events or shocks that may have affected global agricultural markets. The study's findings indicate a stable long‐term relationship between the international and Brazilian corn prices, with changes in international prices being predictors of variations in Brazilian domestic prices, while the opposite was not statistically supported. The study also found no evidence to support the claim that the entry of the corn ethanol industry into Mato Grosso state in 2017 impacted the prices paid to local producers. Therefore, the increase in Brazilian corn prices cannot be attributed to additional demand for corn by local mills, an important result that contributes to discussions such as food versus fuel and indirect land use change.

What drives the high-risk spillover of benchmark oil prices into China's LNG market?

The Russo-Ukrainian conflict and its reverberations on energy markets have heightened concerns regarding energy security. Against the backdrop of fluctuations in international oil prices, oil-gas linkage pricing severely jeopardizes the security of the Chinese gas market. Clarifying the mechanism of high-risk spillover of international oil prices to Chinese LNG is essential for the safe operation of gas. We examine the dynamic spillover effects of Brent, WTI, Dubai crude oil, and Chinese LNG prices using the dynamic connectedness based on TVP-VAR. We innovatively establish the BART-QCA framework to screen the conditions and identify pathways that exacerbate the high-risk spillover of international oil prices to Chinese LNG. The study finds that: (1) Chinese LNG prices are net recipients from the three primary crude oil prices. (2) four pathways exacerbate the high-risk spillover, confirming the situational characteristics of high-risk spillover. (3) The increase in global economic policy uncertainty and China's high external dependence on gas are essential conditions for the high-risk spillover. (4) three pathways mitigate the high-risk spillover. A clear global economic policy situation, reasonable control of public opinion, and the weakening of the US dollar help alleviate high-risk spillover. Accordingly, new policies should achieve scenario-based governance through cross-market and multi-sectoral synergies.

The Russia-Ukraine conflict, soaring international energy prices, and implications for global economic policies

This study examines the economic impact of soaring international energy prices during the Russia-Ukraine conflict from February 23, 2022, to May 31, 2022. Notably, by applying a CGE model, this study offers insights into energy policies at both macroeconomic and industrial levels, emphasizing the model's utility in analyzing complex economic interactions under geopolitical stress. Findings indicate that: (1) Russia, a critical energy-producing country, faced severe economic setbacks due to sanctions, with its GDP contracting by 5.5 %, household income decreasing by 4 %, and consumer spending dropping by 3.5 %. This was accompanied by a significant reduction in domestic investment by 6 %, a decline in output by 5 %, and a decrease in societal welfare indicators. (2) Other energy-producing countries or regions, such as the Middle Eastern oil-producing countries, Australia, Canada, Mexico, and Southeast Asia, experienced economic benefits from the global energy market's “crowding-out effect.” These regions saw an increase in GDP ranging from 2 % to 4.5 %, output growth by 3 %–6 %, and household income and consumption improvements by approximately 3 %–5 %. However, these benefits were tempered by a 1 %–2.5 % decline in domestic investment due to rising local energy costs. (3) Developed and developing regions, suffered adverse impacts, including the US, UK, EU, Japan, China, South Asia, Middle Eastern non-oil-producing countries, and Africa. These regions reported a decrease in GDP by 0.5 %–3 %, a decline in household income by 2 %–4 %, and lower consumption rates by 1.5 %–3.5 %. The economic strain was further exacerbated by an inflation increase of up to 2 % across these economies. This research offers valuable insights for governments and policymakers globally to address the challenges posed by the Ukraine crisis-induced energy crisis, underscoring the need for strategic energy policy adjustments and economic resilience planning.

Time varying characteristics of factors affecting carbon price in emission trading scheme in China: Evidence from SV-TVP-VAR approach

Analysis of the factors influencing the price of carbon emissions trading in China and its time-varying characteristics is essential for the smooth operation of the carbon trading system. We analyse the time-varying effects of public concern, degree of carbon regulation, crude oil price, international carbon price and interest rate level on China’s carbon price through SV-TVP-VAR model. Among them, the quantification of public concern and the degree of carbon emission regulation is based on microblog text and government decisions. The results show that all the factors influencing carbon price are significantly time-varying, with the shocks of each factor on carbon price rising before 2019 and turning significantly thereafter. The short-term shock effect of each factor is more significant compared to the medium- and long-term, and the effect almost disappears at a lag of six months. Thanks to public environmental awareness, low-carbon awareness and the progress of carbon market management mechanisms, public concern has had the most significant impact on carbon price since 2019. With the promulgation of relevant management measures for the carbon market, relevant regulations on carbon emission accounting, financing constraints, and carbon emission quota allocation for emission-controlled enterprises have become increasingly mature, and carbon price signals are more sensitive to market information. The above findings provide substantial empirical evidence for all stakeholders in the market, who need to recognize that the impact of non-structural factors on the price of carbon varies over time. Government intervention also serves as a key aspect of carbon emission control and requires the introduction of relevant constraints and incentives. In particular, emission-controlling firms need to focus on the policy direction of the carbon market, and focus on the impact of Internet public opinion on business production while reducing carbon allowance demand and energy dependence.

Analysis of Factors Affecting Indonesian Natural Rubber Exports

The aim of this research is to determine and analyze the short-term and long-term influence of Indonesian natural rubber production variables, international consumption, and international natural rubber prices on Indonesian natural rubber exports. This research was carried out using Time series data for the period 1989-2022 using numerical calculations of research variables using the Error Correction Model (ECM) analysis method assisted by EViews12 software. The population used in this research is information on Indonesian Natural Rubber Exports for 1989-2022. As a result of the analysis and discussion that has been carried out, it can be concluded that: Indonesian Natural Rubber Production has a positive influence in both the long and short term on Indonesian Natural Rubber Exports. International Natural Rubber Consumption in the long term has an insignificant influence with a negative correlation on the volume of Indonesian Natural Rubber Exports. International Natural Rubber Prices in both the long and short term have an insignificant influence with a positive correlation on Indonesian Natural Rubber Exports.

Competitiveness of Bali Province’s Cocoa Exports in the International Market

International trade greatly influences a country's economic growth. If a country exports more than it imports, that country's national income will increase, thus having a positive effect on economic growth. Indonesia has various products that are traded on the international market, one of which is cocoa produced by Bali Province. This research aims to analyze the competitiveness of Bali Province's cocoa exports in the international market along with the factors that influence the cocoa commodity exports. This research is quantitative descriptive research with the data used is annual data on the value of Bali Province cocoa exports for a period of 12 years from 2010 to 2021. The data collection technique used in this research is a literature study in the relevant agency (Disperindag Bali Province). Based on data analysis, it was found that Bali Province's cocoa exports in the period 2010 - 2021 did not have a comparative advantage as shown by the RCA analysis value of 0.54. Meanwhile, if we look at the competitive advantage based on the EPD analysis value, it is found that on average the Bali Province cocoa commodity is in a falling star position, which means it has a competitive advantage but low competitiveness. The export value of Bali Province's cocoa commodities is significantly influenced by the amount of cocoa production, the USD exchange rate, and inflation. Meanwhile, the international price of cocoa has not had a significant effect on the value of Bali Province's cocoa commodity exports.

Competitiveness of Bali Province’s Cocoa Exports in the International Market

International trade greatly influences a country's economic growth. If a country exports more than it imports, that country's national income will increase, thus having a positive effect on economic growth. Indonesia has various products that are traded on the international market, one of which is cocoa produced by Bali Province. This research aims to analyze the competitiveness of Bali Province's cocoa exports in the international market along with the factors that influence the cocoa commodity exports. This research is quantitative descriptive research with the data used is annual data on the value of Bali Province cocoa exports for a period of 12 years from 2010 to 2021. The data collection technique used in this research is a literature study in the relevant agency (Disperindag Bali Province). Based on data analysis, it was found that Bali Province's cocoa exports in the period 2010 - 2021 did not have a comparative advantage as shown by the RCA analysis value of 0.54. Meanwhile, if we look at the competitive advantage based on the EPD analysis value, it is found that on average the Bali Province cocoa commodity is in a falling star position, which means it has a competitive advantage but low competitiveness. The export value of Bali Province's cocoa commodities is significantly influenced by the amount of cocoa production, the USD exchange rate, and inflation. Meanwhile, the international price of cocoa has not had a significant effect on the value of Bali Province's cocoa commodity exports.

Effects of adverse geopolitical risk on price bubbles contagion from European natural gas prices to international energy prices

PurposeThe recent Russia–Ukraine conflict highlights the geopolitical importance of natural gas, especially in Europe. In this light, this study examines the impact of the Russia–Ukraine conflict on the spread of price bubbles from European natural gas to international energy prices.Design/methodology/approachThe Generalized Supremum Augmented Dickey-Fuller (GSADF) test is employed to detect the occurrence of price bubble episodes while the Dynamic Logit Model is used to examine price bubble contagion between the two markets. Further, a tri-variate VAR model is used to examine the determinants of the price bubble.FindingsThe findings reveal multiple bubble episodes in both European natural gas and international energy prices. Further, evidence of bilateral contagion between European natural gas and the international energy market is found. In addition, the Russia–Ukraine conflict triggers price bubble episodes in both markets. Finally, a counterfactual analysis suggests that the conflict increases the bubble contagion from the European natural gas market to the international energy market by about 40%. These findings imply that the Russia–Ukraine conflict is a significant driver of high upside risks to bubble occurrence and subsequent contagion to both European natural gas and international energy prices.Originality/valueTo the best of our knowledge, this study contributes new empirical evidence that the Russian–Ukrainian conflict significantly impacts the spread of price bubbles from the European natural gas market to international energy markets.

Trade war: the steel and aluminum markets and the trade governance

The international institutionalism has been under debate. The World Trade Organization (WTO) has not been immune to strong criticisms that has been exacerbated in recent years. A turning point in this process was the trade war between the United States and China that began in 2018. It was characterized by tariff increases that persist. The contribution of this work is to show how these measures taken by relevant global players (such as the United Sates and China) have significantly affected the international markets and it impacted on third countries, not only in terms of trade flows but also when considering the international trade regulatory framework. The drop in the demand from the United States implied a fall in the global demand that caused a fall in international prices. Moreover, it is shown that Trump's measures were successful given that China was substituted by other suppliers. Finally, his protectionist strategy against China, was accompanied by a broader strategy against the World Trade Organization by blocking not only the negotiations during the Buenos Aires Ministerial Conference but also the Dispute Settlement System.

Indonesian Coffee Exports in The Global Market and The Variables That Affect Them

The aim of this research is to analyse the situation of Indonesian coffee exports in the short and long term and the reasons why Indonesian coffee exports are able to compete in the global market. The data used in this research is secondary data in the form of numerical data with time series data type over a period of 72 months (January 2016 - December 2021). The analytical method used is the Error Correction Model (ECM) using the dependent variable the volume of Indonesian coffee exports and the independent variables, namely coffee production, exchange rate, inflation, international coffee prices and substitute prices. The research results show that there are no variables that significantly influence Indonesian coffee export volumes in the short term. In the long term, only coffee production has a significant positive effect, and the exchange rate has a significant negative effect, while the other variables have no significant effect. There are several reasons for the demand for coffee exported from Indonesia, namely the type, taste quality, aroma and uniqueness of the coffee produced in Indonesia.

STAD-GCN: Spatial–Temporal Attention-based Dynamic Graph Convolutional Network for retail market price prediction

As technology advances, competition among market players intensifies, highlighting the importance of comprehending both one’s own and competitors’ pricing strategies. Traditional approaches often rely on static factors for price forecasting, disregarding the dynamic nature of market competition. In contrast to methods utilizing a static graph structure and uniform weights for predictions, we introduce STAD-GCN (Spatial–Temporal Attention-based Dynamic Graph Convolutional Network). This innovative model dynamically incorporates competitive factors into price prediction by employing attention mechanisms and graph convolution operations. Such an approach allows for the adaptation of graph structures and node relationships in response to temporal and spatial changes, offering a more nuanced understanding of market dynamics. To test STAD-GCN, we utilized international and domestic oil price data alongside specific gas station details from the South Korea National Oil Corporation, focusing on Seoul and Busan. The model presents remarkable performance, achieving mean absolute errors of 12.648 in Seoul and 11.242 in Busan, surpassing state-of-the-art models. Based on the findings of our research, we present some academic and practical implications, as well as several future research directions.

Novel solid oxide fuel cell system integrating adsorption cooling, heating, and carbon dioxide fertilization for greenhouse tomato production

Fuel cells have been widely used for power sources in the power plant, building, and transportation sectors, while few attempts have been made to use fuel cells for agriculture. Heating costs make up a high proportion of agricultural operating costs, and fossil fuels are the primary fuels used, which affects agricultural income according to changes in international oil prices. This study proposes a novel solid oxide fuel cell(SOFC) system integrates adsorption cooling, heating, and carbon dioxide fertilization for greenhouse tomato production. To confirm the superiority of the proposed system (Case 3) in terms of efficiency, its energy consumption is compared with that of the reference systems (cases 1 and 2). Case 1 uses only the air-cooled scroll chiller while Cases 2 and 3 utilize both the air-cooled scroll chiller and the adsorption chiller as a heating and cooling device for the horticulture. In order to reduce the energy consumption for the horticulture thermal management, electrical and thermal energy required for the adsorption chiller are supplied by the SOFC. Case 3 supplied SOFC exhaust gas to fertilize carbon dioxide in horticulture for photosynthesis of the tomato. To determine the heating and cooling loads for horticulture, horticulture energy modeling has been developed based on target temperature, weather data, and tomato evapotranspiration using TRNSYS®. The total power consumption in Case 3 is reduced by up to 12 % during the heating season compared to Case 1, but it increases by up to 6.2 % during the cooling season. For Case 2, there is a savings of 9.8 % during the heating season but an increase of up to 4.1 % during the cooling season compared to Case 1. The study contributes to reduction of the energy consumption for the greenhouse crops production. This finally results in the significant reduction of the carbon emission and the enhancement of the economics in agricultural field.

The Nexus of Crude Oil and Food Prices: Evidence of the Crude Oil Prices Influence on Food Insecurity Problem

Food cost is a fundamental factor in reducing world hunger and minimizing the food insecurity problem. Agricultural commodities prices, especially grains, are determinants of food costs. Therefore, studying the behavior of commodity prices responsible for food security on the planet is essential for economic agents, especially for macroeconomic policy decision-makers. Food production and prices are related to energy prices, mainly through biofuels and fertilizers. Among energy sources, crude oil is one of the main ones in the world's energy matrix. Many studies on crude oil and food prices have been carried out relating energy and food or, more specifically, crude oil and agricultural commodity prices. This work examines the dynamic relationship between oil and grain commodity prices: rice, wheat, corn and soybeans. It also verifies the causality and cointegration between each grain and crude oil price return. Besides that, Autoregressive vector models were estimated to infer the impulse response function and the variance decomposition. The sample period corresponds to the interval between the two biggest crises of the century, the subprime financial crisis and the Covid-19 pandemic sanitary crisis. Thus, the data is not impacted by significant abnormal variations caused by these crises. The inferences show an interaction between crude oil prices practiced in the international market and food commodity prices.

The benefits of elastic fuel taxation

Current fuel taxation in France presents a blind spot, since it does not consider the oil price. This article explores the benefits of a tax rate 'elastic' to the price of a barrel of oil: if international prices soar, the tax rate would be lowered, and vice versa. Such a mechanism has generated limited literature, even though it could be of interest given the strong volatility of oil prices over the two last decades. We analyze the conditions of implementation and the implications of such an elastic tax, first from a theoretical point of view, and then empirically through a retrospective quantification of its effects, if it had been introduced in France from 2010. We conclude that an elastic tax could efficiently lower price peaks at the pump, thus increasing the acceptability of fuel taxes. The impact on public finances can be controlled and would be limited. With such a mechanism, the Yellow Vests movement might have been more limited, as well as the costly measures put in place in reaction to the war in Ukraine. This principle of elasticity in fuel taxation thus deserves the attention of all oil-importing countries, well beyond the French case.